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Why Is TikTok So Valuable? Jim Cramer Explains

Jim Cramer weighs in on the ongoing talks between Microsoft and TikTok and TikTok's value as an acquisition.

In case you somehow missed it, Microsoft is continuing to pursue negotiations to buy TikTok from parent company ByteDance.

Late Monday, President Donald Trump stoked international tensions after he demanded that taxpayers receive a "substantial portion" of any sale of the American operations of TikTok, the China-based social media app. The president late last week had ordered it to be sold.

In response, the state-backed China Daily newspaper said Tuesday that "China will by no means accept the ‘theft’ of a Chinese technology company, and it has plenty of ways to respond if the administration carries out its planned smash and grab."

So here's what we know: Microsoft said that it will explore a purchase of its popular social media platform TikTok in the U.S in a blog post on Sunday.

Microsoft is aiming to wrap negotiotians by September 15 and said "during this process, Microsoft looks forward to continuing dialogue with the United States Government, including the President."

The company added that it decided to continue negotiations following a conversation between Microsoft CEO Satya Nadella and President Donald Trump, who tweeted last week that he would seek to ban the app in the U.S.

Microsoft is interested in purchasing TikTok's operations in the U.S., Canada, Australia and New Zealand, and the company said it may invite other American investors to join as minority investors.

"Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred," Microsoft said in its statement. 

So where's the value for Microsoft? Though he thinks there's a better buyer out there, Jim Cramer said the acquisition would allow Microsoft to finally appeal to the younger demographic it has long coveted. 

Watch More: Cramer Says Trump Would Never Allow Apple to Buy TikTok

Do you think Microsoft is the right fit for TikTok? Tell us in the comments below.